Brookfield New Horizons Income Fund
CNSX : BIF.UN

Brookfield New Horizons Income Fund

February 17, 2016 16:37 ET

Brookfield New Horizons Income Fund Announces Expiry of Forward Agreement and Amendments to Declaration of Trust

TORONTO, ONTARIO--(Marketwired - Feb. 17, 2016) - Brookfield Investment Management (Canada) Inc. (the "Manager"), the manager of Brookfield New Horizons Income Fund (the "Fund") (CSE:BIF.UN), announces that the Fund's forward agreement (the "Forward Agreement") will expire on April 1, 2016 (the "Expiry Date"). The Fund currently obtains exposure to the portfolio (the "Portfolio") held by New Horizons Master Fund (the "Reference Fund") through the Forward Agreement. The Portfolio is focused on, but not limited to, investments in high yield corporate debt, and publically-listed securities in infrastructure and real estate companies.

The Income Tax Act (Canada) was amended in December 2013 to implement proposals that were first announced in the March 21, 2013 federal budget regarding the income tax treatment of character conversion transactions (the "Tax Changes"). Under the Tax Changes, the favourable tax treatment of character conversion transactions will be eliminated.

After a prescribed date (the "Effective Date"), gains (and losses) realized by a fund under certain forward purchase and sale agreements will be treated as ordinary income (or loss) rather than a capital gain (or capital loss). The Expiry Date for the Fund is the Effective Date.

Upon expiry of the Forward Agreement on the Expiry Date, the Manager intends to continue to pursue the Fund's investment strategy directly without the Forward Agreement.

Subject to obtaining the required regulatory approvals, the Fund's investment objectives will be amended on or about the Expiry Date to remove all references to the use of the Forward Agreement to gain exposure to the Reference Fund, to delete references to "tax-advantaged" distributions and to clarify that the Fund will invest directly in securities similar to those held by the Reference Fund. The Fund's declaration of trust will be amended in accordance with its terms to reflect the termination of the Forward Agreement and other necessary amendments associated with the change.

The investment objectives of the Fund after the amendments will be: (i) to provide holders of units with quarterly cash distributions targeted at a rate of the average 10-Year Canadian Government Bond Yield plus 4.00%; and (ii) to preserve the net asset value of the Fund.

Following the termination of the Forward Agreement, a greater portion of distributions paid by the Fund will be taxable as compared to distributions prior to the Effective Date.

However, it is anticipated that the Fund, and therefore its holders, will save approximately 0.50% of net asset value per annum by not employing the Forward Agreement. The aggregate management fee received by the Manager from the Fund will remain the same as received from the Fund and the Reference Fund prior to the Expiry Date. The termination of the Forward Agreement will not affect the status of the Fund as a "mutual fund trust" under the Tax Act.

Brookfield New Horizons Income Fund (the "Fund") seeks to provide holders of units with a source of tax-advantaged income by obtaining exposure to a portfolio that includes, but is not limited to, investments in high yield corporate debt and publicly-listed securities in infrastructure and real estate companies globally. Brookfield Investment Management (Canada) Inc., an affiliate of Brookfield Asset Management Inc. is the manager and investment manager of the Fund.

Brookfield Investment Management (the "Firm") is an SEC-registered investment advisor providing real assets public securities strategies including global listed real estate and infrastructure equities as well as corporate credit and securitized credit. With nearly $17 billion of assets under management as of December 31, 2015, the Firm manages institutional separate accounts, registered funds and other investment products for clients, including financial institutions, public and private pension plans, insurance companies, endowments and foundations, sovereign wealth funds and high net-worth investors. Headquartered in New York, NY, the Firm and its affiliates also maintain offices in Boston, Chicago, London and Toronto.

The Fund uses its website as a channel of distribution of material company information. Financial and other material information regarding the Fund is routinely posted on and accessible at www.brookfieldim.com.

Brookfield Investment Management is a wholly-owned subsidiary of Brookfield Asset Management, a leading global alternative asset manager with over $200 billion of assets under management as of September 30, 2015. For more information, go to www.Brookfield.com.

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